Finance Globe

U.S. financial and economic topics from several finance writers.

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3 minutes reading time (570 words)

Wall Street Banker Bonuses - An Outrage

Even after receiving billions of dollars in bailouts from Troubled Asset Relief Program (TARP) funds, Wall Street bankers gave themselves about $18 billion in bonuses in the past two months, according to a report from the New York State comptroller.

How is that even possible? I always thought bonuses were for doing a good job at running a successful and profitable company.

Do these bank execs think they should continue to live it up even as businesses are going bankrupt, about 2.6 million Americans have lost their jobs, consumers are struggling to pay their bills, record numbers of homeowners are facing foreclosure, and investors' retirement funds have melted away?

And the ridiculous thing about it all is that the financial crisis originated in the banking industry. It wasn't like they were suffering because of somebody else's dumb decisions.

Their bad mortgage investments threatened their financial survival and our entire economic system. So bad was their plight that Congress approved $700 billion - about half of which is already spent - in rescue money to save the banks, hoping that it would trickle down to stem the recession.

Well, the economic problems haven't been fixed, and it's likely to continue to get worse for Americans. But Wall Street bankers gave themselves a bonus after receiving taxpayer money. Did they really believe that the American public would find that as acceptable, as many of us are still suffering from an economic problem we didn't even help create?

Well, President Obama surely wasn't happy about it. He criticized bank executives yesterday after meeting with VP Joe Biden, Treasury Secretary Tim Geithner, and the rest of his economic team.

Obama said that when he saw the article about the bank execs bonuses "at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads -- that is the height of irresponsibility. It is shameful."

"And part of what we're going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. The American people understand that we've got a big hole that we've got to dig ourselves out of -- but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," he said.

Also mentioned was the multi-million dollar jet plane purchase that Citigroup recently planned for - while receiving TARP funds - and that Secretary Geithner had to pull them back from going forward with the deal. Obama said, "We shouldn't have to do that because they should know better. And we will continue to send that message loud and clear."

President Obama expressed confidence that with the economic rescue plan currently in the works "we are going to be able to set up a regulatory framework that rights the ship and that gets us moving again. And I know the American people are eager to get moving again -- they want to work. They are serious about their responsibilities; I am, too, in this White House and I hope that the folks on Wall Street are going to be thinking in the same way."

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Thursday, 09 July 2020

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